COLUMBUS - The Ohio House yesterday unanimously sent the Senate a $7.8 billion, two-year transportation and public safety budget that banks on nearly $200 million that may not exist.
Gov. Ted Strickland vowed to veto a provision added by House Republicans that would earmark for major highway and bridge construction $194 million that would be generated if the state's tax on business gross receipts were extended to gasoline and other petroleum sales.
A Commercial Activities Tax exemption for motor fuel sales will expire June 30.
"If he doesn't like it, he certainly has that discretion [to veto]," House Speaker Jon Husted (R., Kettering) said. "But he would be putting us in a position of either saying that we have enough money for transportation projects or we don't care whether or not we have enough money for transportation projects."
Mr. Strickland has warned that the state's Transportation Review and Advisory Committee has committed to projects it can't afford because of rising construction costs and flat gas-tax collections.
He called for a re-evaluation of priorities using a new scoring system that gives added weight to a project's economic value in addition to safety and congestion concerns.
Fearing a recalculation could delay top-tier projects like the $460 million Fort-to-Port upgrade of U.S. 24, lawmakers stripped the language from the bill. They said Mr. Strickland doesn't need their approval to change TRAC criteria.
"We believe we have the authority to conduct the review, and we intend to do so," Strickland spokesman Keith Dailey said.
He declined to say whether Mr. Strickland intends to allow the moratorium on taxing gas sales to expire. That answer could come in today's State of the State address or tomorrow's unveiling of the governor's two-year general budget proposal.
Some Democrats have interpreted Mr. Strickland's comments about allowing the rollout of tax reform to mean he will let the exemption expire.
Democrats voted for the transportation budget after failing to kill the tax language. They said the move breaks a promise that tax collections for the first five years would be used to offset losses suffered by school districts and local governments because of the elimination of another state business tax on equipment, furniture, and inventory.
"The governor on the campaign trail and after being elected had said that, although he's not perfectly comfortable with the tax reform this General Assembly passed and the governor [Bob Taft] signed, he is committed to allowing it to work," Rep. Steve Driehaus (D., Cincinnati) said.
"He made the commitment," he said. "We are breaking the promise today."
Republicans said schools and local governments are still protected for five transition years, particularly since the CAT has proven more lucrative than expected.
They said adding revenue from taxing gas sales into the general fund would likely create a windfall that would trigger provisions to roll back tax rates.
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